The principal contention upon which the appellants rely for a reversal is that the respondent is not entitled to recover, as the road was not built by him or his assigns, but was built by the Oregon & Washington Territory Railroad Company. The court instructed the jury that, if the respondent procured the road to be constructed by said company, he had thereby complied with his contract in that regard. We think this construction of the contract was proper. The object of the appellants in making their subscription was to obtain a road which would secure them reasonable freight charges and service in shipping their produce. There can be no question but that the respondent was the procuring and promoting cause in the construction of the road. He could not secure the necessary right of way, and was therefore compelled to organize a corporation to exercise the right of eminent domain. He not only owned substantially all of the capital stock of the said corporation, but he caused it to be organized,, for the express purpose of obtaining the necessary right of way and constructing the road in compliance with the terms of the contract of subscription. We see no reason why he could not do this. Nor do we understand why the appellants should not be liable to him upon such performance. The court further instructed the jury as follows: "Before you can find for the plaintiff you must find from the evidence that there was a substantial compliance with the conditions of the written instrument; and, in arriving at your conclusions as to whether he has substantially met the conditions put upon him by this contract, you have a right to consider all the surrounding circumstances, the character of the country, and the character and number of the population. In other words, you must try to put yourselves in the position of the parties at the time the contract was made, and decide what was their intention." The appellants now contend that prejudicial error was committed in giving this instruction. They insist that a strict performance of the contract was necessary in every respect, and that a substantial compliance therewith was not sufficient. They claim (1) that the road should begin at Wallula Junction and not one mile therefrom; and (2) that it should have been built by the respondent, personally, or by his assignees, and not by any corporation not his assignee. In support of this contention, for a strict and technical performance of the contract, they cite, with others, the following cases: Town of Birch Cooley v. First Natl. Bank (Minn.) 90 N. W. 789; M. K. & C. Ry. Co. v. Thompson, 24 Kan. 170; Virginia T. R. R. Co. v. Lyon County, 6 Nev. 68; Winona v. Minnesota Railway Construction Company, 27 Minn. 415, 6 N. W. 795, 8 N. W. 148. These cases, upon a casual examination, might appear to sustain the position assumed by appellants, but in all of them the rights and powers of municipal cor

porations in voting subsides in aid of railway construction seem to be especially involved. The principal case upon which the appellants seem to rely is that of Town of Birch Cooley v. First National Bank, supra, in which it appears that a municipal corporation had voted bonds in aid of the construction of a railway, thereby imposing an indebtedness upon all of its taxable property. The court held a strict compliance with all of the terms of the subscription contract to be a necessary condition precedent to the issue of said bonds, and in the course of its opinion, after stating the rule of substantial compliance, as applied to building and similar contracts, said: "This rule of substantial compliance, however, does not apply to contracts for the issuing of municipal bonds to aid in the construction of a railway; for they are not within the reason of the rule. In such cases, whether the bonds are delivered or not. neither the railroad nor any part thereof ever becomes the property of the municipality; but the ownership thereof remains unimpaired in the railroad company. It parts with nothing. Railway Co. v. Thompson, 24 Kan. 182. The issuing and delivery of the bonds in such a case as this one are, and can only be, authorized by the vote of a majority of the electors of the municipality, and no officers thereof can modify or waive the conditions upon which the electors vote to authorize the delivery of the bonds. * Again, where a majority of the voters of a town, whether they own any property therein or not, are authorized to, and do conditionally, incumber all of the property within the limits of the town to provide a bonus to a railroad company, strict performance of all of the conditions should be exacted of it." Later on in its opinion the court quotes with approval the following language from State v. City of Minneapolis, 32 Minn. 501, 21 N. W. 722: "It hardly needs the citation of authorities to sustain the proposition that, when a municipal corporation votes its bonds to aid the building of a railroad on certain terms and conditions, it is entitled to a strict and full compliance with all these terms and conditions on the part of the railroad company before the latter is entitled to the bonds."

From this language it is apparent that a strict rule was invoked on behalf of a municipal corporation, which had endeavored to impose a burden of indebtedness upon all of its taxable property. No financial obligation of any municipal corporation is in question in this action. Although the contract here involved provides for a subsidy in aid of railroad construction, nevertheless it is between private individuals, and affects their rights only. It neither involves the power of taxation nor the right of a municipality to issue its bonds in aid of railway construction. In Virginia, etc., R. R. Co. v. Lyon Co., supra, cited by appellants, the court recognized the rule that a substantial compliance with the terms of a subsidy contract was suf

ficient. But, as there was an absolute failure on the part of the railroad company to carry out the provisions of its contract in a material respect, it was held not entitled to recover. We have carefully examined the entire record, including the instructions given, and those refused, and from such examination are unable to conclude that any prejudicial error has been committed. The appellants have had a fair trial. The verdict is sustained by the evidence. No prejudicial error was committed in admitting or rejecting evidence, nor in denying appellants' motion for a nonsuit, nor in overruling their motion for a new trial.

The judgment is affirmed.

MOUNT, C. J., and HADLEY and ROOT, JJ., concur.

RUDKIN, J. (dissenting). It seems to me that the contract in suit clearly calls for the construction of a continuous line of road from at or near Wallula Junction to Walla Walla by way of the head of Eureka Flat, and that such contract is not complied with by the construction of a road from at or near Wallula Junction to Walla Walla, through Eureka Flat, with a branch or spur running to the head of the Flat. In other words, I think the

main line should extend to the head of the Flat, and not a branch or spur from the main line. I therefore dissent.

(40 Wash. 138)

KREBBS v. OREGON R. & NAVIGATION

CO. et al.

2. EVIDENCE-CONVERSATIONS IN THE ABSENCE OF A PARTY.

Proof of information conveyed by one defendant to another in the absence of plaintiff, relating to the subject-matter of a letter, written by the defendant to whom the information was given, after the receipt of the information, and claimed by plaintiff to be an admission, is competent, as tending to show the meaning and intent of the words employed in the letter.

[Ed. Note. For cases in point, see vol. 20, Cent. Dig. Evidence, §§ 1063-1067.]

Appeal from Superior Court, Los Angeles County; D. K. Trask, Judge.

Action by Frank B. Dennie against William A. Clark and another. Judgment for defendants. Plaintiff appeals. Affirmed.

Tanner, Taft & Odell, for appellant. Will A. Strong and Works, Lee & Works, for respondents.

ALLEN, J. Action to recover the price and value of certain goods alleged to have been sold by plaintiff to the defendants under a written contract of sale and purchase. Trial to a jury. Verdict and judgment for defendants. Plaintiff moved for a new trial, which was denied, and appeals from the judgment and order.

Plaintiff by his complaint averred that the defendants, in writing, ordered from the

plaintiff certain goods and merchandise to be shipped to Los Angeles, in which they agreed to pay the price and value thereof, less a discount of 20 per cent, and freight, one-third in three months, one-third in four months, and one-third in six months from date of shipment; that, pursuant to such order,

For majority opinion, see 82 Pac. 130.

DUNBAR, J. I dissent. The ladder was evidently placed on the side of the car for the use of the brakeman, and the plaintiff, in the hurried discharge of his duties, ought not be held to too nice a discrimination in the time when, or circumstances under which, he should use a particular appliance. The company was guilty of gross negligence in maintaining the bridge in a condition dangerous to its employé, and ought to respond in damages for the injuries sustained.

The judgment should be affirmed.

13 Cal. App. 760)

DENNIE v. CLARK et al. (Court of Appeal, Second District, California. Tune 22, 1906. Rehearing Denied July 20, 1906. Denied by Supreme Court August 20, 1906.)

1. CONTRACTS-ACTIONS-PROOF OF ALTERA

TION-PLEADING.

Under the denial in the answer of execution of the contract sued on, defendants may prove that the contract contained material alterations made after it was signed.

[Ed. Note.-For cases in point, see vol. 11, Cent. Dig. Contracts, §§ 1724-1726; vol. 2, Cent. Dig. Alteration of Instruments, §§ 227, 228.]

received the same and paid the freight; that no part of the price and value had been paid to plaintiff by defendants. Defendants denied that they ever purchased the goods under a written contract, or otherwise; denied that they ever executed a contract in writing for the purchase of such goods; and by way of separate defense alleged that the only contract or agreement ever entered into between plaintiff and defendants was for the consignment by plaintiff to defendants of certain goods, to be by defendants sold on commission; that defendants were to advance the freight for plaintiff and to account to plaintiff for the amount of goods actually sold, less a commission of 20 per cent. thereon for handling; that the plaintiff was, by agent, to effect the sales, defray any expense, and report such sales to the defendants, who should fill orders for goods thus sold, and become responsible for the price and value of orders filled; that the only contract or agreement in writing ever entered into was that plaintiff should prepare upon a printed form a list of goods to be shipped under such agreement, and upon presentation by plaintiff of what purported to be such list defendants signed the same as evidence of willingness to receive such goods upon arrival at Los Angeles, and for no other purpose; and by way of counterclaim the

defendants set up the contract, as in the separate defense averred, and averred that they advanced certain freight upon such goods and received the same in their warehouse, and plaintiff failed and refused to negotiate sales thereof, or to receive said goods from them, and they have been required to provide storeroom for them to their damage, for which they ask judgment.

Upon the trial plaintiff offered in evidence a written contract, in effect as claimed by plaintiff in the complaint. Defendants were permitted to introduce evidence that the written instrument so offered in evidence by plaintiff was never signed in the form presented; that many material alterations had been made therein; that it had been in plaintiff's possession continuously after signing, and that defendants had never had possession thereof. Further, that the only contract ever made was as set out in the special defense and counterclaim, and that the written agreement evidenced no contract ever entered into between plaintiff and the defendants. There was much conflict in the testimony, and many matters offered by plaintiff in the nature of admissions after the goods had been shipped, and testimony as to the acts of defendants connected with the paying of freight, and their control, not consistent with their claim as to the character of the instrument actually signed. It was the duty of the jury, however, to pass upon all of these questions of fact, and to determine the nature of the actual agreement; to determine whether the written agreement had been executed or not; and its finding, in effect, was that the agreement was as claimed by defendants, and that the written contract relied upon by plaintiff was never executed, and nothing appears in the record which would justify us in disturbing its verdict. None of the matters by way of admission, or acts performed by defendants in connection with the receipt of the goods and their custody over the same, amounted to an estoppel. There was no change of relation upon the faith thereof, and no prejudice resulted to plaintiff by reason of any reliance upon any acts or statement of defendant made or occurring after the delivery of the goods. Whatever force these admissions had was in connection with the main fact of the execution of the instrument. The evidence as to changes in the instrument after the same was signed was admissible under the issue raised by the denial of execution. The effect of this was not to introduce new matter, but to prove that the cause of action as alleged did not exist and had never existed. Landis v. Morrissey, 69 Cal. 86, 10 Pac. 258. That the making and delivery of the contract set out in the complaint was not the act of defendants. Hall v. Auburn Turnpike Co., 27 Cal. 257, 87 Am. Dec. 75. There was no admission that a cause of action once existed and a plea in avoidance, which would be a special defense, as in Michalitschke v. Wells Fargo & Co., 118 Cal, 688, 50 Pac. 847.

Nor was any of the evidence offered by defendants received for the purpose of chan ging or varying a written contract, the execu tion of which was established, but was properly received to show that the contract actually agreed upon to be signed was different from the one offered in evidence by plaintiff, and as tending to show the alterations therein and their materiality, and particularly to show that the instrument offered in evidence by plaintiff was not an agreement ever entered into or contemplated by the parties, and in support of the special defense.

The evidence as to conversations between the defendants in the absence of plaintiff, or his agent, was admissible for the purpose of explaining certain written statements claimed by plaintiff to be admissions against his interests. The information conveyed to one of the defendants by the other relating to the subject-matter of such subsequent letter was competent as tending to show the meaning and intent of the words employed and the understanding of the writer of the letter as to the status of all parties.

We perceive no error in refusing charges 2 and 3 proffered by plaintiff. As to charge 2, it was inapplicable under the evidence, while charge 3 is open to the criticism of attempting to charge as to the weight and effect of the testimony before the jury. We find no error in the many other specifications not herein specially noticed.

The judgment and order are affirmed.
We concur: GRAY, P. J.; SMITH, J.

(149 Cal. 505)

LEWIS v. OGRAM. (L. A. 1.647.) (Supreme Court of California. July 30, 1906. Rehearing Denied Aug. 27, 1906.) BOUNDARIES ESTABLISHMENTS MENT BETWEEN OWNERS.

AGREE

Where the government surveyor "flagged" the line between adjoining homesteads, and before the final survey the homesteaders executed an agreement reciting a "controversy as to the line" and that it was agreed that a fence erected should be the line and that one would not file on a certain part of his claim, and the fence was not within 10 chains of the flagged line, the agreement, being evidently intended to operate on title, was not within the rule as to the settlement of boundaries, the parties knowing that the true line was elsewhere, and hence was not binding.

[Ed. Note. For cases in point, see vol. 8, Cent. Dig. Boundaries, § 216.]

In Bank. Appeal from Superior Court, San Bernardino County; J. W. Taggart, Judge.

Action by Syra E. Lewis against Johnson Ogram. Judgment for defendant. Plaintiff appeals. Affirmed.

Wm. G. Griffith, for appellant. B. F. Thomas, for respondent.

SHAW, J. Lewis sued Ogram to recover damages for trespass on land alleged to be in his possession, described as the N. % of the N. W. 4 of the N. W. 4 of section 23,

township 5, range 28. Ogram filed a crosscomplaint in the usual form to quiet his alleged title against the claims of plaintiff. Issue was joined upon the averments of the complaint and cross-complaint, respectively, and after a trial the court gave judgment for the defendant. Plaintiff appeals.

The S. W. 4 of section 14 lies north of and adjoins the N. W. 4 of section 23. The official United States survey of the boundary line between the sections was not completed until February, 1900. In April, 1897, Lewis was residing upon the S. W. 4 of section 14, and Ogram was residing upon the N. W. 4 of section 23, each claiming the right, under the United States land laws, to file a homestead claim upon his particular tract when open for entry. The location of the division line between the two tracts was at that time uncertain, but both parties supposed it to be about 10 chains south of the true line as afterwards surveyed and established. Lewis was occupying all that part of the actual N. W. 4 of section 23, lying between this supposed line and the true line, embracing substantially the N. % of said 40-acre tract, claiming and believing, until August, 1898, that it was a part of the S. W. 14 of section 14, and that it was covered by his entry. In August, 1898, the government surveyor, at Ogram's request and with the knowledge of Lewis, "flagged" a line through between the two sections, on or near the true line, and set a post at the common section corner thus located at the west end line. The court finds that Lewis, thereafter, until this action was begun, continued in peaceful and exclusive possession of the 20 acres of section 23 in controversy, "but with full knowledge that the said portion of section 23 was not covered by his filing." The finding also states that the "exact location of the dividing line between said homestead of the plaintiff and the N. W. 4 of the N. W. 4 of section 23" was not known by either Lewis or Ogram until the official survey in February, 1900. In January, 1899, Lewis and Ogram orally agreed to establish a division line between their respective claims, and for that purpose measured 10 chains south from the aforesaid line "flagged" by the surveyor and, at that distance therefrom, built a fence at joint expense, as and for a division fence between their claims. On November 16, 1899, they executed the following agreement:

"Whereas there is a controversy between said parties hereto as to the boundary lines of their respective government claims including in part the northwest quarter of the northwest quarter of section 23, township 5 north, range 28 west S. B. M., and whereas they are desirous of settling said controversy. Now therefore said parties do mutually agree as follows, viz.: That the said Ogram will not include in his filing any part of the north half of said parcel of land, and Lewis hereby agrees that he will not include any part of the south half of said parcel of land. The

said parties further agree that the fence now subsisting and dividing their respective claims of said parcel of land shall be and remain the division line of their said claims irrespective as to what may be the true line that would divide said parcel of land in two equal parts lying north and south of such true division line. In witness whereof we have hereunto set our hands this 6th day of November, 1899."

In February, 1900, the official survey was completed, showing that the 20 acres in dispute constituted the N. 2 of the N. W. of the N. W. 4 of section 23, that it was not included in the homestead claim of Lewis, and that the line "flagged" through in August, 1898, was substantially correct. On April 5, 1900, Ogram filed his claim for a homestead upon the N. W. 4 of section 23, including this 20 acres. In July, 1902, Lewis instituted in the United States land office a contest of the said entry of Ogram with respect to the 20 acres, setting forth as his ground for contest the same facts relied on by him in this action. A heåring of the contest was refused by the register and receiver, no appeal was taken from the ruling, and, on September 22, 1902, a patent was duly issued by the United States granting the land to the defendant Ogram.

The rule upon which Lewis, the plaintiff, relies is thus stated in the decisions of this court: "Where coterminous proprietors of land, in good faith agree upon, fix, and establish a boundary line between their respective tracts of land, in which they acquiesce, and under which they occupy, for a period equal to that fixed by the statute of limitations, the line as thus established is binding upon them." Cooper v. Vierra, 59 Cal. 283; White v. Spreckels, 75 Cal. 616, 17 Pac. 715; Helm v. Wilson, 76 Cal. 485, 18 Pac. 604; Dierssen v. Nelson, 138 Cal. 398, 71 Pac. 456. In other cases it is said that the occupancy in pursuance of the agreement need not continue for the period of the statute of limitations. This is obviously so where other conditions creating an estoppel exist. Cavanaugh v. Jackson, 91 Cal. 583, 27 Pac. 931; Helm v. Wilson, supra. This qualification, however, is not important in this case. Such an agreement, necessarily, is not valid for any other purpose than that of settling an uncertainty in regard to the common boundary. If adjoining owners agree on a division line, knowing that it is not the true line, and with the purpose of thereby transferring from one of them to the other a body of land which they know his true line does not embrace, the agreement will not be enforced. Such a transaction would not constitute an adjustment of uncertainties or doubts as to the line, but would be an attempt to convey or release land from one to the other. Land cannot be conveyed by the device of moving fences or changing the marks or monuments which define its limits. If an agreement having for its real

object the transfer of the land, but relating by its terms solely to the boundary line and made with knowledge that the true line is elsewhere than at the place fixed, is oral, it would be void, being an attempt to transfer land without writing. If it is in writing it would be ineffectual to pass title, for it would lack the apt words of conveyance that are necessary to accomplish a transfer of real property. The authorities are to the effect that these agreements, when deemed valid, are of such a nature that they do not operate upon the title at all. It is said that "one party does not purport or attempt to sell or convey to the other any land" (Sneed v. Osborn, 25 Cal. 630); that such agreement is "not a contract for the sale or conveyance of lands, and has no ingredients of such a contract" (Boyd v. Graves, 4 Wheat. [U. S.] 413, 4 L. Ed. 628); that "adjoining owners who adjust their partition line by parol, do not create or convey any estate whatever between themselves; no such thought or intention influences their conduct; after their boundary line is fixed by consent they hold up to it by virtue of their title deeds and not by virtue of a parol transfer" (Hagey v. Detweiler, 35 Pa. 409); and that "agreements of this character * * are not considered as extending the title. They do not operate as a conveyance so as to pass the title from one to the other, but proceed upon the theory that the true line of separation is in dispute, and to some extent unknown, and in such cases the agreement serves to fix the line to which the title extends." White v. Spreckels, supra.

The facts found clearly show that the agreement in question, although in terms purporting only to fix the division line, could have had no other object or purpose than to operate upon the title or right of possession of the parties to the land which they knew was not within the limits of Lewis' claim. There was, it is true, some uncertainty as to the "exact location" of the section line at the time the agreement was made, but it arose solely from the fact that the flagged line, although made by the government surveyor, had not then become official or final and was still subject to correction and change. The findings, properly construed, are not in conflict on this subject, as claimed by the appellant. There was no doubt or uncertainty over the fact that the so-called division line agreed upon was not the true line, nor anywhere within 10 chains of the true line, nor over the fact that the true line did not include in Lewis' claim any part of the 20 acres lying between the agreed line and the flagged line, the same 20 acres which Lewis now seeks to have transferred to him by virtue of the agreement. agreement itself indicates this, for it does not recite that there was any uncertainty about the location of the line, but merely that there was a "controversy" about it, which, of course, may have arisen from some other cause. The findings place the absence

The

of such doubt beyond question. Lewis knew that his claim extended only to the south line of section 14, and that it did not cover any of the 20 acres in question, which the agreed line would give him. He, therefore, must have known that the true line was not 10 chains south of the flagged line, but was either coincident with the flagged line, or somewhere to the north of it. The object and purpose of the agreement, therefore, could not have been to resolve or settle any existing doubts as to the exact location of the section line. This explains the finding that no consideration passed. If the agreement was made to settle a doubt about the division line, and in good faith to substitute an arbitrary line as the boundary, no other. consideration than the mutual concessions of the parties would be necessary. The court below must, therefore, have believed that there was no such purpose and no such concession, and that, for the real object it was intended to accomplish, no consideration was given or received. The line agreed on, in view of the known facts, had no relation to the true line, and could not have been intended to represent the true line. There must have been some ulterior object. It may have been made for the purpose of allowing Lewis an opportunity to change his possession and, when the land was open for entry, file his claim to include this 20 acres, as he would have had the right to do. But he did not see fit to do this, and when the time within which he could have done so expired, Ogram, or any other qualified person, was at liberty to enter it.

Whatever the real purse may have been, the agreement can have no present effect on the title. It does not, by its terms, purport to convey or transfer any land, or operate upon the title in any manner, and consequently does not effect an estoppel by covenant or agreement. And, being without consideration, it could not, in any event, operate to create such an estoppel. It had no relation whatever to the true line, nor to any doubt concerning the location of the boundary, and hence it does not come within the rule which makes an agreed line binding between the parties, not as a contract to convey, but as an attempt in good faith to make certain that which before was in doubt. We are, therefore, of the opinion that the court below was correct in its decision.

The judgment is affirmed.